Financing in Milwaukee>Question Details

Monique Hall, Both Buyer and Seller in Milwaukee County, WI

I cannot get pre approved for a mortgage. I have a 610 FICO, but I already have an FHA. Can I get a loan and keep my current home for rental property?

Asked by Monique Hall, Milwaukee County, WI Tue Dec 7, 2010

My husband and I net 6500 monthly and have 2300 in debt monthly, so we have the income to support both homes. I cannot get a home loan because my current FHA has more than 2 late pays in the last 12 mos. I have selected a home, is there anything that I can do to purchase? I do not want the home to go into foreclosure and be bought by investors. The home has been on the market for a whole year now. Is there anything that I can do?

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John Burke’s answer
BEST ANSWER
@ Daniel

Your statement:
FHA is only for primary residences and you can't currently own a home or have owned one within the last 5 years (first time homebuyer) - THIS IS NOT TRUE.

Monique,

You're in a tough spot. If your current home has an FHA loan you will not be able to buy another home using an FHA loan unless you qualify for one of the few exceptions like you moved out of the area for work.
Your credit score needs to be at least 620+ to qualify for FHA, VA or USDA but a conventional will require either 20% down or a much higher credit score (680+)

The biggest issue is the multiple mortgage lates in the last 12 months. You say you can handle 2 separate mortgages but a lender is going to look at your payment history and say you can't afford to pay the one you've got.

You're best bet is to start off by disputing your mortgage lates to see if you can get them deleted.

Good luck!
1 vote Thank Flag Link Fri Dec 10, 2010
An fha loan is meant for owner occupants, if you decide to rent the property which has a fha loan, you could be in default of that loan. If your home is not selling you should check with a listing agent experienced in short sales and see if it is teh price that is holding your property back from selling.

Please see my blog with tips and advice on shortsales
0 votes Thank Flag Link Wed Dec 8, 2010
Hi Monique,

You have two problems here: 1) FHA will not approve you if you already own a home; and 2) You say you have more than 2 late payments, which will make it hard to even qualify for a conventional mortgage (as per Freddie and Fannie guidelines).

I'm trying to understand your situation here. How are you late on payments and claiming that you can afford a second? Now by late payment do you mean a few days late (but you pay with late fee) or do you mean more than 30 days late, which leads to a ding on your credit report. If you answered more than 30 days late, then no lender will want to approve that loan.

FHA is only for primary residences and you can't currently own a home or have owned one within the last 5 years (first time homebuyer).

The third problem you'd face is FHA guidelines. 620 is the minimum score, provided you meet all other eligibility criteria.


NACA (a non profit) is a great organization for those backed up on mortgages or looking to purchase properties (first time homebuyers only). Go to NACA.com for more info.

Unfortuantely, if you're home has been on the market for a year and hasnt sold, its likely due to pricing. Has your agent given you an honest opinion of value?

Visit makinghomeaffordable.gov to see where you can go for free help on obtaining a loan modification if you're having trouble with your current mortgage.
0 votes Thank Flag Link Tue Dec 7, 2010
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